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Chief of sunken ferry operator grilled over corruption allegations

2014/04/29 10:37

INCHEON, April 29 (Yonhap) -- The head of a capsized ferry's operator appeared before prosecutors Tuesday to face questioning over various corruption allegations surrounding the owner family of the shipping company.

Kim Han-sik, the chief executive of Chonghaejin Marine Co. that owns and operates the Sewol, showed up at the Incheon District Prosecutors' Office in the western port city of Incheon around 10:00 a.m. as a suspect in a widening investigation.

The summons came as part of the probe into what caused the deadly sinking of the Sewol on April 16 that has killed 193 people and left more than 100 others still missing. Of the 476 people aboard the ship, which sank in waters off the southwestern island of Jindo, only 174 people were rescued.

The prosecution suspects that the 72-year-old chief is one of seven close aides to Yoo Byung-eun, a former chief of Semo Marine Co., the predecessor of the operator of the Sewol, and was deeply involved in the alleged crimes committed by Yoo.

Charges against Yoo and the owner family include embezzlement, dereliction of duty, tax evasion and bribery, prosecutors said.

Yoo's family is suspected of accumulating at least 240 billion won (US$230.7 million) in assets by embezzling corporate funds while failing to fulfill its duty of properly managing the companies. Prosecutors have also traced their hidden assets to pay damages to the victims and their families.

The prosecution has also notified Yoo's second son and his daughter to return to South Korea from overseas to face questioning.

The second son, Yoo Hyuck-ki, is one of the biggest shareholders in I-One-I holdings, along with the first son, Dae-hyun. The holding company owns stakes in Chonhaiji, a shipbuilding unit, which in turn owns about 40 percent of the ferry operator Chonghaejin Marine.

Yoo Hyuck-ki also owns an around 10 percent stake in Ahae Corp., a paint manufacturing company, and Ahae Press Corp, while the first son also holds a majority stake in Chonghaejin and door-to-door sales company Dapanda Co.

Such cross-share holdings helped the family manage and control the entire group of companies, including more than a dozen overseas units, some of which are being implicated in the deadly sinking of the Sewol.

Kim, who owns an 11.6 percent stake in the company, is one of the firm's top three shareholders along with the two sons, prosecutors said. Kim, in a wheelchair, appeared in public last week when Chonghaejin apologized for the disaster.

(END)

(Notice) Corrections and Official Statement by EBC

*Pursuant to an order by the Press Arbitration Commission, we have been asked to publish the following statement from the Evangelical Baptist Church (EBC).

Evangelical Baptist Church ("EBC," the "Salvation Group"*) and Mr. Yoo Byung-eun Related Corrections and Official Statement by EBC

After the April 16, 2014 Sewol ferry tragedy, the media published a flood of indiscriminate articles regarding the EBC (also known as Guwonpa* in Korean) and Mr. Yoo Byung-eun. Due to the immense volume of articles, it is impossible to correct and counter every single one. Therefore, in agreement with the EBC and the surviving family of Mr. Yoo Byung-eun, we are publishing the following combined corrections and Official Statement by EBC.

* This label, which is translated as the Salvation Group, has been applied disparagingly to the Evangelical Baptist Church

The majority of the media reported that, as the owner of the Sewol ferry, Mr. Yoo Byung-eun directly managed Chonghaejin and its affiliated companies and that he used operating funds for personal purposes. However, Mr. Yoo retired from his executive management position in 1997. He did not own any shares in the noted companies, nor had he managed operations, nor used the operating funds for personal reasons. He was not the owner of the Sewol ferry, nor the Chief Executive Officer of Chonghaejin. As such, he had not provided any directives in regards to the overloading of the Sewol ferry or its renovation (e.g. expansion of the cabins and cargo area).

Although some media outlets reported that Mr. Yoo Byung-eun had established favorable relationships by paying bribes to politicians, Korean Prosecutors' Office verified last October that reports of such bribery activity were false. We hereby correct all articles pertaining to this matter.

The majority of the media reported that Mr. Yoo Byung-eun was a wealthy billionaire who owned real estate properties, including Geumsuwon, both in Korea and abroad under other people’s names and that he diverted the tithes and offerings made to the EBC to an illicit fund and expanded his businesses.

The EBC has confirmed that reports of his wealth incorrectly included real estate properties owned by farming associations, which had been established by church members. Thus, these reported properties were not held by Mr. Yoo Byung-eun in another person’s name, but are owned by the noted farming associations. Additionally, Mr. Yoo did not embezzle from the EBC nor did he expand his businesses by diverting tithes or offerings of the pertaining church and its members into an illicit fund.

The EBC has stated that Mr. Yoo Byung-eun was not a religious sect leader. Although he was ordained as a pastor in the 1970s by missionaries at the Far East Broadcasting Company, he did not serve as a pastor. There is no pastor in the EBC, since it is a congregation of laymen.

It was also verified that Mr. Yoo Byung-eun did not participate in the official

process to register EBC as a church in 1981, nor had he been revered as a religious sect leader or been made into a God-like figure by the pertaining church or its members.

The majority of the media reported that the EBC is a religious cult and that it preaches doctrines that are not consistent with Christianity. There are certain churches in Korea that call the EBC a cult, solely based on differences between their and the EBC’s doctrines. However, the EBC has affirmed its belief in the Bible, the Trinity, Jesus’ conception by the Holy Spirit, His birth, death, and resurrection. The EBC does not worship a particular individual as a religious sect leader or preach any doctrine that contradicts the Bible.

It was verified that the captain and the crew members who abandoned the ship at the time of the Sewol ferry accident are not members of the EBC. Only two people have been confirmed as members of the EBC: the late Jeong Hyun-seon, who died while evacuating passengers and thus was designated a national hero, and another person, who had been rescuing passengers and was himself later rescued in an unconscious state. It has also been verified that the EBC does not own any shares of Chonghaejin and that it did not engage in its management. Furthermore, the EBC has stated that Lee Yong-wook, a senior Coast Guard official, has not attended the EBC for the past 15 years.

The majority of the media reported that Mr. Yoo Byung-eun attempted to flee the country by ship, that he requested asylum in several countries but was rejected, and that he possessed firearms to protect himself. The prosecutors hastily announced without confirming the facts that Mr. Yoo Byung-eun attempted to seek asylum. However, two months later on August 18, the prosecutors revised their statement noting that “upon investigation into the identity of the caller, a person with no relation to the Salvation Group had placed a prank call.” In addition, there was no evidence of any attempt by Mr. Yoo to flee the country. It has also been confirmed that the firearms alleged to be in his possession were collectibles. Furthermore, not only were they collectibles that could not be operated they were also not in his possession while he was fleeing.

Some news articles created the impression that the EBC and Mr. Yoo Byung-eun were behind the Odaeyang mass suicide incident. Some also reported that Mr. Yoo Byung-eun had been able to rapidly grow the Semo Group in the 1980s (e.g. securing the business rights to operate the Han River Ferry Cruise) by using a connection with Mr. Chun Kyung-hwan and a close relationship with the former President Chun Doo-hwan’s Fifth Republic of Korea. However, the Odaeyang mass suicide incident was thoroughly investigated by the prosecution and the police three times—in 1987, 1989, and 1991. All three investigations concluded that the EBC and Mr. Yoo Byung-eun had no connection to the incident. Also, neither Mr. Yoo Byung-eun nor the EBC had any collusive ties with the Fifth Republic of Korea. All of this was verified in the official document issued from the Incheon District Prosecutors’ Office on May 21, 2014.

"We sincerely request of the press to serve the public’s right to know with objective and balanced reporting, guarding against biased arguments from its interviewees, all the while fulfilling its duty and responsibility to create no victims from such reporting.

We ask the press to reflect upon its manner of reporting on the Sewol ferry accident. Without waiting for the truth to be revealed through the completion of the investigative and judicial process, the reporting largely focused on releasing exclusive and sensational news reports, which led to misleading the public and essentially conducting a trial in the court of public opinion. We also ask the press to avoid compromising the democratic principles of a constitutional state and to prudently take strict precautions against those forces that aim to take advantage of this period of heartbreak for this nation in order to advance their own position and authority."

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